Empirical richness

The book draws on fine-grained explorations of field realities. Empirical richness is undoubtedly the first strength of the book. The reader discovers the account books of Tamil Chettiar bankers of pre-colonial India and the various techniques—financial, social, and moral—deployed to forge an efficient and powerful transnational financial community. Also in pre-colonial India, the reader is introduced to print advertising, the precursor of contemporary mass media, whose role was central in shaping ‘vernacular’ firms, local distribution networks embedded in specific local realities, and a new form of small-scale industrial capitalism. In the contemporary era, the reader continues to explore various market devices, from the grimoires and amulets of contemporary bazaars to the massive use of icons of divinity in building the reputation of bazaar vendors, from the disruptions caused by the introduction of electronic balances in agricultural markets to the crucial role of gossiping in shaping lenders’ and debtors’ reputations. The ‘morality of exchange’Footnote ⁵ appears forcefully: where to sell (or buy); to whom; at what price; when, what, and how to pay; what records to keep of the transactions: all these questions obey precise cultural and moral norms set in time and space. Very clearly, markets appear to be both ‘moralized and moralizing’ (p. 236).

The reader becomes familiar with the complexities and intricacies of market jurisdictions: housing and the multiple and changing meanings of the very definition of ‘property’; the numerous and changing authorities that organize, structure, and control the purchase and sale of agricultural products; the multiple definitions of legal and illegal alcohol; how the regulation of lotteries inadvertently creates the conditions for various illegal activities; and finally, sand, where the state itself is the conductor of illegal extractivism and the rule of law seems to have lost all legitimacy. The sand market appears as the archetypal criminalized market, now a central feature of the contemporary Indian economy and democracy.Footnote ⁶

The inadequacy of neoclassical economics

This thick description of concrete markets shows the inadequacy of the assumptions of neoclassical economics. Markets are not the meeting place of supply and demand, but first and foremost an ‘exchange’, as two of the four editors emphasize in a solid introduction that puts into perspective some of the threads of the book. It is first and foremost this exchange, imbued with morality, sociality, and power, as well as beliefs and representations of the world embedded in time and space, that shape the content and the nature of each and every market. The protagonists of market exchanges are not ‘homo economicus’ seeking to maximize their self-interest, nor ‘homo collectivicus’ manipulated by the community or tradition (an equally problematic interpretation). The protagonists of markets are not reduced to a producer and a consumer (or a creditor and debtor). They include a wide variety of actors such as law enforcement, henchmen, intermediaries, or owners. All of them are first and foremost social and moral beings, filled with rights and obligations, juggling the search for accumulation or simply their survival, on the one hand, with the endless search for dignity, respect, and reputation, on the other.

The ‘self-regulation of markets’, another normative precept of neoclassic economics—which is supposed to lead to a fairer and efficient, morally and economically superior society—is also being shattered. Not only is the state instrumental in shaping market rules and often complicit in illegal and illicit markets, but ‘multiple sovereignties rather than a unitary state frame transactions culture in India’ (p. 14). These multiple sovereignties are sometimes contradictory, sometimes competitive, and obey multiple objectives: to control, to extract value (whether in the form of rents or taxes), to eliminate intermediaries, to moralize, and to discriminate against specific segments of the population (cf. the specific regulation of artisanal alcohol of the Adivasis in Jharkhand). This ‘baroque complexity’ (p. 16) engenders processes through which various sorts of jurisdiction overlap, sometimes resulting in conflict, where legal and state regulation often create the conditions for illegality, and where state regulation sometimes takes the form of its absence.

The various chapters offer telling examples of this ‘baroque complexity’: how the constitution of urban property as a market draws on overlapping jurisdictions where multiple forms of pre-colonial and colonial land are stacked and articulated; how the state, through the diversity of its entities and administrations, both redistributes through the food ration shops while organizing its own levies on this redistribution; how legal lotteries desperately need illegal lotteries for their own functioning; how the central state regulation of sand extraction is gradually turning into unbridled extractivism orchestrated by the ruling parties for their own financing; and how legal regulation is doomed to failure since it applies to the departments that are the primary violators of the law.

This baroque complexity reveals an ambiguous, shifting reality, where relations between market protagonists are sometimes made up of conflict and combat and sometimes of complicity and collaboration, such as the solidarity between bureaucrats and populations or the collaboration between competing political parties to share the rent from sand plundering.

From these first two observations—embedded exchanges and contested jurisdictions—a third results: ‘Pliable markets’. Indeed, different chapters show how markets are constantly transforming, adapting, and reconfiguring themselves. Markets offer a ‘remarkable plasticity’ and this plasticity is both shaped by and constitutive of political stakes, ethical and moral norms, and social relations.

The narrowness and arbitrariness of economic categories

Indirectly, and echoing a long tradition of economic anthropology,Footnote ⁷ the chapters highlight the narrowness and arbitrariness of economic categories, which are more a matter of a system of representation than of objective reality. This is very clear in the case of property, whose definition ‘remains fluid and flexible’ (p. 82). It is also the case for finance. From the Chettiars of pre-colonial India to contemporary informal lenders, finance appears to be more than a monetary transaction between a debtor and a creditor, but imbued with social and moral significance. Chettiar bankers scrupulously noted in their account books the amount of each transaction and also the nature of the social relationship with their borrowers, savers, or financiers. They distinguished kin from non-kin, affinal relatives from lineage clan, locals from strangers, themselves differentiated between Asian and European. For today’s informal lenders, the social cost of debt (and conversely its social profitability) appears to be just as important as its financial cost, for both the lender and the borrower. The reputation of the lender relates to his capacity to reschedule and to make moratoria in case of difficulty. The borrower’s reputation relates to their ability, not necessarily to pay on time, but to communicate possible repayment difficulties.

The editors suggest that this book ‘perceives capitalism’s unfolding from fresh angles that, in turn, may facilitate reevaluations of markets in Europe and North America’ (p. 3). They are perfectly right, although they do not give further details. The so-called ‘objective’ methods used by financial analysts to assess the ‘real value’ of companies are no more ‘rational’ than doing a puja, reciting a mantra, or offering alcohol to a deity. Sophisticated financial analytic methods simply act as a convention, a common cognitive framework for understanding the world.Footnote ⁸ The methods of calculating GDP, public debt, and inflation—all expected to give an ‘objective’ account of a country’s wealth, obligations, and prices—also obey a multitude of arbitrary conventions and selective choices which in turn are based on and convey a specific conception of the world.Footnote ⁹ They are not false, but they are no more ‘objective’ than the account books of Chettiar bankers when they distinguished between their partners based on kinship, clan, or territorial ties.

It is also worth noting that in the current context of financialization, the overlap between credit and reputation, considered the ‘main asset’ of sellers, creditors, and debtors (this argument runs through several chapters of the book) is back in the news. Already noted by Bayly in his famous history of Bānaras bazaars,Footnote ¹⁰ this is mentioned by several authors. The overlap was also at the heart of the expansion of markets in pre-modern Europe.Footnote ¹¹ Contemporary financialized capitalism and its speculative functioning bring back to the forefront the crucial role of solvency and reputation.Footnote ¹² States are now more concerned about the level of their public debt and their rating than about their true level of production or the unemployment rate, and companies are more concerned about their attractiveness to shareholders than about their true value. Individuals are now in dire need of debt to make ends meet and to care for their children and pay for their education. Here again, and with the introduction of sophisticated credit rating algorithms using social networks, reputation and solvency tend to become one. As the editors point out, the transformation of markets is not a linear process, much less an evolutionary one.

The authors rightly reject a deterministic view and argue that exchange ‘is embedded within relations that exceed one’s social affiliation […]. The embedded exchange constitutes a transactional realm that touches on, yet eventually transgresses a specific community’ (p. 11). Indeed, exchanges between ‘natives’ and ‘migrants’ or ‘strangers’ are permanent; knowledge systems that predict good fortune combine religions; bazaar traders are bound by relations of neighbourhood and urban affinities.

The political economy of exchanges

If the idea of considering the market always as an ‘exchange’ is convincing, one can wonder about the political economy of the ‘embedded exchange’. Formalization would be the ‘end of humanity’, declares a bag seller from the bazaar of Bānaras (p. 258). One can imagine that he is referring to the crucial role of sociality, personal interactions, and the fear that formalization will make all this disappear. To some extent, although this may not be what the bag seller has in mind, his words also remind us of one of Polanyi’s main messages:Footnote ¹³ attempts to ‘disembed’ the market in pre-industrial Europe were dehumanizing, first and foremost because they destroyed people’s ‘traditional’ protections (the family, the clan, the village). This was untenable and gradually different forms of alternative protection were put in place, leading to the ‘great transformation’. What Polanyi did not or hardly commented on, and I am not sure that the bag seller perceived it either, is the fundamentally hierarchical dimension of these historical forms of protection. Whether they are based on family or village reciprocity or religious or feudal redistribution, historical forms of protection are subject to multiple hierarchies structured by social institutions such as class, caste, religion, gender, location, age, and so forth. Indeed, exchanges cross community affiliations and boundaries. But an infinite number of contemporary examples show to what extent exchange remains shaped by and constitutive of pre-existing social hierarchies.

The multiple efforts of the Indian government to ‘modernize’ the Indian economy and to extract it from social structures and traditions, including at the bottom of the pyramid, shows resistance similar to that of the bag seller. Take the case of the so-called ‘financial inclusion’ policies that are supposed to free poor Indians from moneylenders and allow them to save to protect themselves against the future. The poor are very credit-hungry, but access to ‘formal’ credit does not eliminate the wage advance from the labour recruiter, or the informal loan from the landowner, the local boss, the friend, the neighbour, or the maternal uncle. And if these various forms of exchange persist, it is not necessarily because the working poor appreciate being bonded to their labour recruiter: it is first and foremost because the wage advance guarantees them a job and protects them.Footnote ¹⁴ With regard to bank savings, the results are even more disappointing for policymakers: many of the working poor make very little use of them, simply because it is much more rational to invest in other forms of storage and circulation of value that protect them much better than a bank account would. They more often invest surplus cash in the form of ‘investment in people’Footnote ¹⁵ (such as ceremonial expenses), or multipurpose money (gold in India, while elsewhere it could be livestock, seeds, precious fabrics, and so forth).Footnote ¹⁶ However, such protection comes at a price.

Let us take the example of caste. Caste is a malleable, evolving concept, sometimes used tactically. Nevertheless, the ‘economics of caste’ cannot be ignored.Footnote ¹⁷ When the exchange is formalized by a contract, the role of caste becomes subtler, more indirect, and more discreet. The contract can give the illusion of equality—here, the precepts of neoclassic economics play their performative role. Nevertheless, caste remains a powerful classification operator that is precisely shaped by exchange. In many places in contemporary India, and even as the market economy has gained ground, one rarely borrows from or works for someone ‘lower’ than oneself according to local systems of social hierarchy.Footnote ¹⁸ Gender, insufficiently explored in the book, calls for similar commentary.

Social status and belonging also shape reputations, rightly considered an essential asset by different authors. Social status and belonging also shape to whom the various jurisdictions apply, who benefits from them, and who fixes them. Not everyone benefits in the same way from multiple and contested jurisdictions, as the chapters on sand and alcohol make clear.

Here again, the case of finance is illustrative. Considerable arrears and non-performing assets plague the Indian banking sector.Footnote ¹⁹ This is part of the criminal economy described by Barbara Harriss-White and J. Jeyaranjan and allows the most powerful to default on their debts and absolve themselves of the repayment ethic. This criminal economy relies on a particular reputation: the ‘bosses’ of the Mafia Raj.Footnote ²⁰ As figures who are both ‘admired and feared’, the bosses (most often men) possess ‘quasi-magical powers’ and a ‘charismatic authority’, and in fact ‘the art of bossing’ consists above all in exercising their ‘personal sovereignty’.Footnote ²¹ At the other end of the social scale, the financial inclusion policies mentioned above—also qualified as ‘working class credit’Footnote ²²—have spread over the last two decades, primarily aimed at women. Both jurisdiction and reputation are very different here. Thanks to now very sophisticated credit scoring devices and biometric techniques, repayment default is tantamount to being blacklisted and losing one’s solvency. The result is a very different repayment ethic. It explains why, at the time of writing this article, as the Covid-19 pandemic (and first-and-foremost, the lockdown) ravaged many livelihoods, one of the first anxieties of the Indian working poor, and women in particular, is to repay their loans to financial companies.Footnote ²³ As we can see, while reputation forges exchanges at different ends of the social ladder, reputation does not mean the same thing to everyone. And, obviously, not everyone has the same ability to challenge the courts.

Decolonizing economics

In conclusion, I would like to make two points. First, if the thickness, complexity, and malleability of markets must be explored—and Rethinking Markets does it brilliantly—this should not make us lose sight of their hierarchical dimension: the social and moral fabric of markets is also, very often, an extremely efficient mechanism for extracting surplus and maintaining or reinforcing inequalities.Footnote ²⁴ A key issue in understanding contemporary markets is to study how different forms of morality intertwine (and the precepts of neoclassic economics are one morality among others) and how these moralities reinforce or reconfigure inequalities. Secondly, the dialogue with other regions of the world, only sketched out in the introduction, really deserves to be continued. Markets take shape in specific historical contexts, and understanding them presupposes both historicization and contextualization. But the mechanisms and processes described in the book are surely valid elsewhere, including in the most capitalist and ‘modernized’ societies. Of course, in many parts of the Global North, the ‘embedded exchange’ takes different forms due to the existence of more robust jurisdictions and social protection systems. As a result, the articulation between the principles of redistribution, solidarity, and the market—another major lesson of Polanyi that remains valid in the contemporary global world—takes specific forms.Footnote ²⁵ But the disembedded market does not exist any more than in Rethinking Markets. However, the fiction of the disembedded market does exist and neoclassic economists and policymakers constantly claim it to justify neoliberal and austerity policies.

The fiction also persists because of the impregnation of our categories of thought by neoclassical economics and its performative effects. Neoclassical economics has infused the ways of seeing and thinking of so-called ‘Western’ societies where this knowledge has emerged. Moreover, neoclassical economics has performative effects, in the sense that it transforms the reality it is supposed to study.Footnote ²⁶ This tends to invisibilize the social, moral, and political dimensions of markets, and this is why the detour through non-Western markets is so useful since it helps to deconstruct prevalent categories of thought and, more globally, to decolonize economic thought.Footnote ²⁷ It is this that makes this book such an important contribution: beyond an essential input to the understanding of Indian markets, it is also a valuable step towards the decolonization of economics as a field of knowledge.